FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T FEB RUARY 8, 2012 J OHN L EY CL ERK [DO N OT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

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SFM HOLDINGS, L TD., SALOMON MELGEN, M.D., Pl ai nt iff s –App el la nt s,

ve rs us JEROM E FISHER, Defen da nt– Ap pe ll ee.

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt forth e So ut he rnDis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (Feb ru ary 8, 2 01 2)Befo re MAR TIN andANDERSON, Circu itJu dg es , andSCHLESINGER, Dis tri ct * Ju dg e. PER CURI AM: Thi s ac ti on is th e fo urthth atSFM Ho ld in gs , Ltd . andSal om on Mel ge n, M.D. (co ll ect iv el y , “ Pl ai nt iff s” ) ha ve fil edba se d o n fa ct s re la ti ng to on e o f th e la rg es t s ecu rit ie s fr au d c as es in Flo rid a h is to ry . It was ori gi na ll y fil edinFlo rid a st at e co urt an d a ll eg edth atdi ve rs e d efen da ntBan c o f Am eri ca Se cu rit ie s (“ BAS”) br each eda nu m

be r of ag reem en ts with P la in ti ffs , bo th writ te n a ndim pl ic it , in ha nd li ng Pla in ti ffs ’ BAS acc ou nt . In the same acti on , Pla in ti ffs als o s ue d n on di ve rs e d efen da ntJer om e Fi sh er, al le gi ng th athi s d el ib erat e an d m at eri al
m is rep res en ta ti on s an d o m is si on s caus edPla in ti ffs to m ov e m on ey to BAS an d le av e itth ere l on g e no ug h t o b e st ol en . On ap pe al , th e th res ho ldis su e is whet he r th e d is tri ctco urt p ro pe rly ass ert ed subjec t m at te r juri sd ic ti on ov er the cas e aft er i ts rem ov al to fed eral co urt, o n t he gr ou ndth atth e joi nd er o f no n- di ve rs e d efen da ntFis he r was frau du le nt . W e rev ie w bo th th is qu es ti on of s ub ject m at te r juri sd ic ti on an d t he di st ric t co urt’s de ni al of P la in ti ffs ’ m ot io n t o re m an d d e n ov o. See Hend ers on v. Wash . Nat’l In s. Co ., 45 4 F .3d12 78 , 12 81 (11 th Cir . 20 06 ).
Honora ble Har vey E. Schlesing er, United States District J udg e for the Middle District * of F lorida, sitting by

designation. 2Fi sh er i s a n on -d iv ers e p art y an d a tt em

pt s t o e st ab li sh frau du le ntjoi nd er o f bo th BAS an d h im se lf ( co ll ect iv el y , “ Defen dant s” ) by pro vi ng th atat the ti m e o f rem ov al th ere was no po ss ib il ity Pla in ti ffs co ul d h av e es tabl is he d acau se of a ct io n ag ai ns t Fi sh er i n F lo rid a st at e co urt. See Cro we v. Co le m an , 11 3 F .3d15 36 , 15 38 (1 1t h C ir. 1 99 7) . W e h av e n ot edpre vi ou sl y th atth is bu rd enis a “ he av y on e” 1 si nc e th e fac tu al all eg at io ns in th e co m pl ai ntm us t b e v ie wedin th e li gh t m os t fav or ab le to th e p la in ti ff, id . (qu ot at io n m ark s o m it te d) , andsi nc e “ al l t ha t i s requi redto de feata frau du le ntjoi nd er cl ai m is a po ss ib il it y

of s ta ti ng a va li d c au se of act io n,” Sti ll well v. Al ls ta te Ins . Co., 6 63 F.3d13 29 , 13 33 (11 th Cir . 20 11 ) (quo ta ti onm ark s o m it te d) . Afte r car efu l re vi ew, we co nc lu de Defen da nt s n ev er m etth ei r bu rd en . Und er Fl or id a’s pl ead in g s ta nd ard s, Pl ai nt iff s m erel y ha d “ to st at e a ca se sh owi ng We give Fisher

the bene fit of our c onsiderable doubt that he fa irly raised this ground for 1 remova l in tim ely

fashion. F isher’s f

irst filing in the district cour t after remova l merely

joined the Notice of

Removal filed by

BA S. This Notice by

BA S relied solely

on a diffe rent theor

y for disreg ardingFisher ’s non-diver se status. Fisher ’s joinder did not clea rly add re liance on the fra udulent joinder ground for remova l upon which Fishe r now re lies, thus failing to fa irly apprise either the district court or Plaintiffs of F isher’s r eliance upon the new f raudule nt joinder ground. Although not c lear

beyond pera dventure , the most plausible rea ding of the district court’s de nial of Plaintiffs’ motion to remand is that the cour t relied on the the ory

articulated in the Notice of Removal, and not F isher’s ne w and diff ere nt gr ound. And it is very clea r that Plaintiffs did not have a n opportunity

to brief F isher’s ne w ground bef ore the district court denie d Plaintiffs’ motion to remand. Howe ver, be cause Fisher has fa iled to establish either the origina l theory for disreg ardingFisher ’s non-diver se status (as a rticulated in the N otice of Remova l filed by BA S and joined by

Fisher) or F isher’s ne w theory , we c an g ive Fishe r the be nefit of the doubt a nd enter tain his new fr audulent joinder the ory . The ba lance of this opinion addresses F isher’s ne w theory . 3a le ga l l iabi li ty.” Mess an a v . Mau le Indus ., 50 So . 2d87 4, 8 76 (Fl a. 19 51 ). Thi s

co ul d b e ach ie ve d b y

all eg in g the requi si te ele m en ts of acau se of a ct io n and

“pl ead [in g] factua l m at te r su ffi ci en t t o app ris e [Pl ai nt iff s’] adve rs ary of

what[th e adve rs ary] is cal le d upo n t o a ns wer.” Id . Plai nt iff s’ frau d a ndne gl ig en t m is rep res en ta ti on cla im s cl earl y sat is fie d t hi s s ta nd ard ; the co nv ers io n a nd co ns pi racy clai m s ar gu ab ly didso as we ll . It i s t hu s m or e th anpo ss ib le th ata Fl or id a st at e co urt wo ul d h av e co nc lu de d t ha t Pl ai nt iff s s ta te d acau se of a ct io n. Co ns eque nt ly, th e d is tri ctco urt erredin co nc lu di ng th atFis he r was frau du le nt ly joi ne d. Se e Fl or en ce v . Cres cen t Re s., LLC, 48 4 F .3d12 93 , 12 99 (11 th Cir . 20 07 ) (h ol di ng th at“ if t he re i s an y po ss ib il it y

th atth e st at e la w m ig htim po se li ab il it y

on a res id en t d efen dantun de r th e ci rcu m st an ces all eg edin th e co m pl ai nt , th e fed eral co urt ca nn otfin d t ha t jo in de r of th e res id en t d efen dantwas fr au du le nt ”). 2 Bec au se iterro ne ou sl y

co nc lu de d t ha t Fi sh er h adbe enfrau du le nt ly j oi ne d,

The district cour

t appea red to plac e significant we ight on the f act that Plaintiffs neve r 2 alleg ed wr ong doing on the part of F isher in their prior unsucce ssful liti g ation and that Plaintiffs seeme d to chang e their e arlier story reg arding

who had c onvinced them to invest with J ohn Kim. Yet, Plaintiffs offe red a

n explanation both for why they did not earlier

alleg e wr ong doing on the part of F isher and why

their story

reg ardingwho convince d them to invest with Kim m ight se em differ ent. To be sur e, the district cour t may have ha d rea son to doubt the plausibili ty of Plaintiffs’ overa ll story

about Fishe r’s role in the conspirac y . But, in asse ssing f raudule nt joinder, “the district court’s a uthority to look into t he ultimate merit of the pla intiff’s claim is limit ed to che ckingfor obviously fra udulent or frivolous claims.” Crowe, 113 F .3d at 1542. And, eva luating the fac tual alleg ations in the light most favora ble to Plaintiffs, we conc lude that Plaintiffs’ story

was not so fa

ntastical as to be “ obviously fra udulent or frivolous.” 4th e d is tri ctco urt fu rth er erredwhen itde ci de d the m eri ts of t he cas e d es pi te th e

la ckof e it he r fed eral di ve rs it y juri sd ic ti onor f

ed eral qu es ti on juri sd ic ti on . See 2 8 U.S.C. § 1 44 7( c) (“ If atany ti m e b efo re fi na l ju dg m en t i t ap pe ars th atth e d is tri ct co urt l ack s s ub

ject m at te r juri sd ic ti on , th e cas e sh al l b e rem an de d.” ). All de ci si on s i n t hi s ca se fro m Aug us t 2 6, 2 00 9 o n m

us t t he refo re b e v acat edforlac k of subjec t m atte r juri sd ic ti on . This in cl ud es th e d is tri ctco urt’s Se pt em be r 2, 2 00 9 or de r to di sm is s t he co m

pl ai ntag ai ns t BAS with p reju di ce o n g ro un ds of r es jud ic at a. Fo r th e fo reg oi ng reas on s, we v acat e al l o f th e o rd ers is su edby the di st ric t co urt i n thi s ca se fro m

Aug us t 2 6, 2 00 9 o n, an d re m an d t he cas e ag ai ns t b ot h Fi sh er an d B AS to th e d is tri ctco urt wi th in stru ct io ns to rem an d the cas e to th e st at e co urt fo r fu rth er p ro ceed in gs . VACATED AN D REMANDED W ITH INSTRUCTIONS.

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